The President of the Ghana Association of Restructuring and Insolvency Advisers, GARIA, Felix Addo, says the passage of the Corporate Insolvency Bill, 2019, could not have come at a better time than now.
According to him, with the outbreak of the novel Coronavirus and its economic impact on businesses, the Bill when assented to, will give businesses breathing space from their creditors to plan and re-strategize.
Parliament last Wednesday passed the Bill to provide a framework for the regulation of insolvency practitioners and facilitate access to timely, efficient and impartial liquidation proceedings; either directly or through the creditor’s committees.
The Act will also promote efficient closure and transfer of assets of businesses which are no longer viable, and a proper winding up of businesses where the members for other reasons, decide to cease operations.
Speaking to Citi Business News, Mr. Felix Addo, whose group had been pushing for ther bill, said the passage is timely, considering that the Coronavirus pandemic is taking a toll on businesses that will require time to bounce back without pressure from creditors.
“What it does is that it stays creditors from pursuing their charge orders. So, it allows the company some grace period to re-strategize, re-plan, reprioritize and figure out how best to survive the crisis. Currently, we have the Coronavirus pandemic. The new law once it is assented by the President will be allowing companies to apply and pay their debtor commitments. The creditors will come together and appoint the administrator who will come out with what we call a restructuring plan. This plan which will be signed off by the creditors, 51 percent majority, will allow creditors and the company to come to a mutually acceptable position and that will mean that creditors will not be calling on their lawyers to enforce their charge orders,” he said.
“There will be a lot of companies who will go under. As you know companies are not working. Very few companies are actually operating. Most companies are in a lock down and staff are at home. Suppliers are not servicing the companies. The whole supply chain is down. If this lockdown continues, companies will have the opportunity to re-strategize and redirect their affairs. And this is the law which allows them the flexibility to do just that. So, the timing of the passage is just right,” he added.
COVID-19 Cases in Ghana
Currently, Accra, Tema, Kasoa and Kumasi are under a two-week partial lock-down. The total number of cases confirmed in Ghana so far is 287 with 5 deaths and 3 recoveries.
Six regions have so far recorded confirmed cases of COVID-19.
With the latest update, Greater Accra still leads as the region with the most number of confirmed cases, followed by the Ashanti, Northern, Upper West, Upper East and Eastern Region.